West Indian Lara, 38, who retired in April as the highest run-getter in Tests, confirmed he will take part in the Indian Cricket League (ICL) being promoted by the country's largest listed media group Zee Telefilms.
"It gives me great pleasure to join the ICL," Lara said in a statement released by the organisers.
"I look forward to playing with promising youngsters from India and elsewhere along with some of my illustrious international counterparts who I've shared many an exciting moment with on the field."
Lara is the first foreign player to be officially confirmed for the ICL, but sources close to the organisers said Australian Warne and a host of other international players were on the verge of signing up.
Warne, 37, Test cricket's leading bowler who retired earlier this year, has been linked to the series ever since it was officially unveiled by Zee supremo Subhash Chandra in May.
The ICL features six teams, each featuring four international players, two Indian stars and eight upcoming cricketers playing Twenty20 matches across India.
The dates and venues for the series, which has not been recognised by the International Cricket Council (ICC) or the Board of Control for Cricket in India (BCCI), have yet to be announced.
The ICL, which carries a winner's purse of US$ 1 million is reminiscent of the late Australian TV mogul Kerry Packer's World Cricket Series that took on the establishment in 1977.
Packer roped in the world's top players for the rebel series after being denied official TV rights by the Australian Cricket Board for matches played in the country.
Similarly, Zee Telefilms was rebuffed by the BCCI in 2004 despite being the highest bidder of US$ 308 million for Indian rights for a four-year period.
Indian great Kapil Dev, who captained India to its only World Cup title in 1983, is the ICL's chief executive with former England skipper Tony Greig, Dean Jones of Australia and ex-India wicket-keeper Kiran More on the organising committee.
Dev has already signed up World Cup winning team-mates, Sandeep Patil, Madan Lal and Balwinder Sandhu, as coaches for three of the six proposed teams.
BCCI's take: The BCCI has barred current India players and former players on its payroll from associating with the ICL, but media reports said secret talks were taking place with many active national cricketers.
BCCI secretary Niranjan Shah remained defiant as the ICL spread its wings. "We don't want to promote anybody who wants to be a parallel body. We have a policy and there will not be any re-think on this."